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Government Decides on No Relief without IMF Approval

Caretakers engage with global lender on proposed relief measures aimed at defusing public anger over high electricity bills

by Staff Report

Photo courtesy PID

The caretaker government, in a meeting of the federal cabinet, on Tuesday acknowledged it cannot provide any immediate relief to consumers protesting against high electricity bills unless the International Monetary Fund (IMF) has reviewed its proposed measures and given them a go-ahead.

In this regard, the interim government has reportedly approached the global lender and sought advice on how it can ease the burden on consumers. Among the proposals under consideration are staggered payments—allowing consumers of up to 400 units to pay their bills in installments over the next few months to account for lower consumption in winter, which traditionally leads to lower bills. This proposal, however, risks impacting the revenue to be collected through taxes to curtail circular debt and ensure a primary surplus, as committed to the IMF by the former government under the $3 billion stand-by arrangement.

The government, last week, approached NEPRA to seek a staggering of the imposition of the quarterly tariff adjustment. Initially set to be imposed at Rs. 5.4/unit for three months, the government has proposed imposing Rs. 2.31/unit for six months to reduce the “price shock” for consumers while not deviating from the IMF program.

Speaking with ARY News after attending the cabinet meeting, caretaker Information Minister Murtaza Solangi said the government would announce a decision on relief measures once it had received approval from the IMF. “Caretaker Finance Minister Dr. Shamshad Akhtar is in contact with the IMF officials in this connection,” he said, adding the cabinet had already approved some measures for relief, but they would only be announced after securing approval from the global lender.

The government is also, per local media, considering reducing or outright banning free electricity provided to the VVIPs, VIPs and employees and officers of power distribution companies. However, there has reportedly been no decision taken in this regard, as the caretakers do not wish to enact any measures in haste.

On Sunday, caretaker Prime Minister had given 48 hours to the relevant authorities to propose measures that could provide relief to power consumers and defuse public anger that has seen protests in various cities across Pakistan over the past week. The protests continued on Tuesday, with angry demonstrators burning their bills and refusing to pay them by stating they could either afford food or electricity. The Jamaat-e-Islami has already announced a nationwide strike on Sept. 2 (Saturday) against high electricity bills, adding it would demand relief for consumers and the withdrawal of taxes.

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